Canada-India Comprehensive Economic Partnership Agreement

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There is currently a food tariff policy and non-tariff barriers in India that limit trade and growth for Canadian agri-food producers. For example, India currently applies a 30 per cent tariff to all Canadian lentil exports. According to experts, the removal of tariffs on lentil products alone could potentially lead to a 147 per cent increase in exports over five years. While exports to India have increased over the past 10 years, exports to India account for less than 1% of Canada`s trade. In addition, the Indian population remains highly price sensitive. As a result, trade volumes with India fluctuate considerably each year. Implementation and ratification of the India-Canada Trade Agreement has the potential to increase GDP by $6 billion and generate exports of up to 47 per cent (according to DFATD). However, “progressive trade” is just another obstacle on a negotiating path already strewn with them. The scope of the agreement was a key difference. India “is not prepared to provide the kind of market access that Canada would normally expect from a trade agreement,” he said.

The Indian government has not hesitated to protect politically sensitive sectors, such as agriculture, by recently imposing tariffs on pulses – Canada`s largest individual export to India – to regulate its domestic market. Their priority is labour mobility, especially for technology workers. Modi was brought to power by a particularly young electorate that needs jobs and has been seen as a pro-business leader, eager for sound economic reforms. Canada had evidence of its bonafides of its support for Canadian companies that invested in Gujarat when it was Prime Minister. “We assumed that [it] would bring more openness to trade liberalization,” says Fast. “When I was a minister, we couldn`t translate that into significant progress in investment or the trade agreement.” Some of the challenges are technical. With respect to services, Canada uses a negative list, which means that all services that are not included or developed in the future are affected by the liberalization measures of the agreement. India supports the World Trade Organization agreement that only the sectors covered by the treaty are subject to the revised rules.

And Fast points out that India`s proposal for investment agreements does not contain a “click” clause stipulating that after the liberalization of a sector, investment restrictions cannot be reintroduced. Differences in time, resources and approach between the two bureaucracies have also slowed progress towards an agreement. Canada`s negotiating team of 20 or 25 people was often sitting around the table by only four or five Indian colleagues, says Stewart Beck, CEO of the Asia-Pacific Foundation of Canada and Canada`s High Commissioner for India from 2010 to 2014. And caution is the watchword on the Indian side. “What we understand from Indian technocrats is that they are very systematic,” says Dr. Anita Singh, who studies bilateral relations. “They`re fine, line by line, word for word.” In any event, during Trudeau`s visit, neither trade nor the investment agreement will be signed.

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